Weekly Tax News – 20 April 2020

Weekly Tax News – 20 April 2020

Negotiations on digital taxation at OECD level continue

On 15 April, the OECD declared that the coronavirus crisis could push the negotiations on digital taxation further. A report published by the OECD highlights that after the economic crisis “addressing the tax challenges of the digitalisation of the economy and ensuring that MNEs pay a minimum level of tax (Pillar 2) will become more prominent”. The OECD also reassured that the efforts of the Inclusive Framework to address such challenges is ongoing and well progressing. However, according to rumors, the G20/OECD July meeting to be held in Berlin could be postponed due to the pandemic, which might affect the original plan of reaching an agreement on the main political features of the reform by the end of 2020.

MEPs call for the adoption of public CbCR

On 12 April, eight MEPs sent a letter to the EU Ministers sitting in the Competitive Council requiring a relaunch of the Commission’s proposal on a public Country-by-Country reporting (CbCR). The MEPs who signed the letter represent almost all the political groups of the European Parliament (EPP, S&D, Greens/EFA, Renew Europe, ECR and GUE/NGL). They have highlighted that the proposal on a public CbCR dates back to 2016 and that, in the wake of this crisis, the European decision makers should act in a coordinated manner. The objective is to ensure that the public has an oversight on whether large multinational companies fairly contribute to the recovery efforts, monitoring if those businesses pay their fair share of tax.

European Parliament adopts a resolution to COVID-19 crisis

On 17 April, the European Parliament adopted a resolution on EU coordinated action to combat the COVID-19 pandemic and its consequences. The resolution states the position of the European Parliament ahead of the European Council meeting on 23 April. The President of the European Parliament, David Sassoli pointed out the role that the EU budget could play in financing economic recovery. The large majority of the political groups (EPP, S&D, Greens/EFA and Renew Europe) had initially supported the resolution. However, the votes on the amendments led to the abstention in the final vote of many Greens/EFA MEPs. The issue was linked to the rejection of an amendment proposed by the Greens/EFA calling on pooling debt at European level to issue the so-called “coronabonds”. The Renew Europe MEPs, who largely voted against the amendment, explained that the resolution already mentioned the “recovery bonds”, thus the Greens/EFA amendment would not have brought any added value to the resolution.